2025‑11‑05 Market Commentary – Cinda Securities Co Ltd
Cinda Securities (SH:600018) opened the Shanghai Stock Exchange session at CNY 18.87, a 0.6 % rally from the previous close. With a market cap of ≈61.97 billion CNY and a price‑earnings ratio of 36.36, the stock sits comfortably above the 52‑week high of 21.69 while remaining a few points away from its 52‑week low of 13.21. The firm’s valuation reflects the premium investors are willing to pay for its extensive brokerage and wealth‑management platform, as well as its exposure to the growing power‑sector market.
Power‑sector surge fuels client demand
In early trade on November 5, the power‑sector index posted a sharp up‑trend, with Min Dong Electric hitting a daily limit and Hengsheng Energy surging more than 7 %. Other listed utilities such as Yuneng Holdings, Zhong‑Min Energy, and Le Shan Power all rose over 3 %. The sector’s momentum is driven by China’s continued focus on maintaining supply security and the gradual liberalisation of electricity pricing mechanisms.
Cinda Securities’ analysts highlighted that the “dual‑carbon” policy—which mandates a transition to a low‑carbon power system—will sustain demand for coal‑based generation assets that can be flexibly dispatched. They anticipate that the introduction of a capacity‑pricing mechanism will cement coal power’s foundational role while also expanding the spot and ancillary‑service markets. As a result, the brokerage’s exposure to the utilities and renewable‑energy space is expected to benefit from a more stable and potentially upward‑trending pricing environment.
Implications for Cinda’s revenue mix
Cinda’s wealth‑management division has historically been the main driver of fee income, but the firm’s asset‑management and advisory businesses are increasingly tapping the power‑sector’s institutional clients. With the sector’s profitability improving, institutional investors are likely to allocate more capital to power‑sector equities, infrastructure, and related derivative products. This shift will generate higher trading volumes and fee income for Cinda, reinforcing its revenue diversification away from retail brokerage.
Forward‑looking stance
Given the sectoral backdrop and the firm’s robust market position, Cinda Securities appears well‑placed to capture the upside from China’s evolving power market. The 36.36 PE multiple, while higher than the broader index, signals that investors remain confident in the brokerage’s growth prospects and its ability to translate sector momentum into profitability. If the power‑sector’s pricing reforms accelerate as forecast, Cinda’s earnings trajectory should reflect a gradual yet steady improvement, providing a solid foundation for future equity valuations.
